1. Bobs Machine Shop, Inc., has a 1-year contract for the production of 240,000 gear housings for a new off-road vehicle. Owner Bob Smith hopes the contract will be extended and the volume increased next year. Smith has developed costs for three alternatives. They are generalpurpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:

	GPE	FMS	DM
Annual contracted units	240,000	240,000	240,000
Annual fixed cost	120,000	240,000	400,000
Per unit variable cost	16.00	14.00	12.00

a. Determine the number of units where the GPS and FMS system has the same cost.

b. Determine the number of units where the FMS and DM system has the same cost.

c. Which process is best for this contract?

d. Graph the crossover points between the various systems.

Please type out as much as you can